A changing landscape
Running a business on the Gold Coast has never been for the faint of heart, it is a market which has always drawn businesses comfortable embracing rapid change and employing contrarian thinking. It’s what makes the city always feel like it has an edge to it. But as Gold Coast companies build out their long-term strategic plans they will have to prepare for a drastically different business environment than the one they face today. Those that are able to adapt their business model will likely quickly cement a leadership position, whilst businesses refusing to change will likely see a slow demise over the next decade.
The key question is whether business owners will be able to recognise, adapt to and profit from the macro economic trends currently impacting the region. These trends were of course present well before COVID, albeit relatively unheeded, however it was the pandemic that has amplified both their speed and impact.
Our research at Barcley suggests that there are 4 key macro trends that will fundamentally shift the business environment on the Gold Coast as we hurtle towards 2030.
1. The great southern migration
The influx of southerners to our sunny shores is nothing new, but what is unique is scale of immigration. In the last 12 months alone more than 100,000 people have migrated to Queensland from interstate – primarily NSW or Victoria. This level of net migration is more than 5 times what it was in 2010.
These new immigrants will drive a fundamental impact in our economy both in terms of higher levels of consumer spending but also in terms of increased labour force talent to operate and grow Gold Coast businesses. Most importantly, interstate migrants bring with them significant amounts of capital that needs to be redeployed – to date this has contributed to heating up the property market but could also be easily re-directed into developing local businesses.
2. Greying of the Gold Coast
An ageing local population, as well as older interstate migrants choosing to make the Gold Coast their home, means that the city’s demographics are in state of flux like never before. For the first time the Gold Coast has more residents over 44 than under 44, and the segment of over 65s is growing 200% faster than the broader population.
This fundamental shift has far reaching implications for how companies need to adjust their business models. Consumers in their second half of life have significantly higher disposable income but also much higher expectations when it comes to quality and service standards. They spend less money on housing and family purposes and instead spend up big on eating out, recreation and well-being related services. A long-forgotten segment, companies that are able to build a value proposition for greying Gold Coasters will capture a large, growing and affluent segment.
3. A new diversity of industry
While the Gold Coast skyline perpetuates the stereotype of the Goldie as a property and tourist town, the truth is that economy is in transition. The largest industry on the Gold Coast, at least by employment is Health Care. This is thanks to an eyewatering growth rate of 32% over the last 5 years; no doubt influenced by demographic trends discussed above but also robust public policy planning at both a state and local government level. Tourism (accommodation and food) remains strong but newer industries are growing at rates, which over the next decade, will redefine the city’s industry profile. Manufacturing, as an example, has grown at 24% over the last 5 years and is now knocking on the door of the top 5 industries, education also added some additional 3,000 jobs since 2015.
4. Connectivity imperative
Physical location, whilst one of the Gold Coast’s strengths, has also been it one of its greatest weaknesses. The fact that the coast is so far removed from economic powerhouses Sydney and Melbourne has meant the city has often been overlooked as a corporate headquarters location. This perspective is however rapidly disappearing as technology enables new ways of communicating, and COVID removes any previous corporate resistance to remote working. The next step to a seamless virtual workspace is the finalization of 5G which will provide connections approximately 20 times faster than 4G. We expect that 5G will integrate the internet into the world around us like electricity, ultra-fast speeds and reliability will provide a backbone for IoT, smart grids, autonomous vehicles and virtual reality, realizing the full potential of these technologies.
For business this means that geographical constraints will begin to melt away – doing remote maintenance on an oil rig in WA, real time security monitoring for client in ACT or even undertaking remote surgery using robots will become not only possible but normal. For Gold Coast businesses this will mean expanding their potential market of customers enormously as well as enabling new possibilities in terms of suppliers and talent.
How can you prepare for 2030
Leading Gold Coast companies are already preparing plans to respond to the changing marketplace. Market leaders already have strategies that define concrete actions for investment in new products and new blue ocean segments underpinned by an agile IT infrastructure enabling real time connectivity. Business leaders should consider a 3 step approach to future proof their operations.
Rethink your product portfolio
The best products are not built on cutting edge technology or historical capability but rather the identification of new or unserved customer needs. Look for pain points within your customer base or more broadly in your sector. Anticipate what additional requirements your customers are likely to have as they deal with the changing environment around them.
As an example, LIFT LABS, seeing a greying population, built their product portfolio around the simple observation that people with Parkinsons find it difficult to feed themselves. The company’s premiere product is a rechargeable handheld device capable of stabilizing a common household instrument like a spoon, fork, or tweezers. The device has built-in sensors that detect tremors and cancellation technology that eliminates, on average, 70 percent of a person’s tremor.
Broaden how you define your industry
Kodak famously said that it was in the “film” industry – the problem with such a defining statement is that you unnecessarily tie your fortunes to fate of a particular market. In the case of Kodak that was of course a fatal mistake. On the Gold Coast similar risks apply, defining yourself as hotel developer is going to mean that you are going to enjoy some great years as well as some lean ones.
The best companies define themselves by how they add value to their client lives, giving them the flexibility to move and adjust their business model as the environment around the changes and new opportunities come up. Nike, for example, argue their purpose is not related to shoes but to “bring inspiration and innovation to every athlete”.
Redefining what a company does typically opens up a new perspective on how it can take advantage of the trends and changes going on around it.
Use technology to connect your business
Companies are typically confused about where they should focus when it comes to technology – vendors present a never-ending array of complex systems with vague business cases. Whilst IT architecture is a complex subject with its own considerations, leading innovators prioritize technology that connects a business with customers as well as with its staff, suppliers and stakeholders.
Childcare has long suffered from disgruntled parents complaining about the high cost of daycare, however the simple act of installing parent portals where anxious parents get real time updates and photos of their child’s learning journey has dramatically increased customer satisfaction as well as customer retention.
Enabling technologies that allow businesses to communicate, service and share information seamlessly with their clients provide the greatest potential for businesses to service existing client needs and unlock new ones.
About the author – Luke Ingles is the Managing Partner of Barcley Consulting, a boutique strategy consulting firm located on the Gold Coast. For more information on their other publications please visit https://barcley.com.au/.
